Help to Buy borrowers should consider remortgaging when their deals mature, Leeds Building Society has suggested.
An estimated 32,000 people took advantage of Help to Buy deals in 2015, and with many of them taking out two-year fixed rates, Leeds Building Society claimed they ought to be able to find better deals when these come to an end this year.
The average two-year fixed rate was 2.83 per cent in April 2015 for buyers with 75 per cent loan-to-value.
Leeds, which has launched a Help to Buy mortgage at 1.5 per cent for 75 per cent loan-to-value, said that those who switched a mortgage they had taken out for £150,000 two years ago at the average rate could save £91.35 a month if they were to switch to the Leeds rate.
“Homeowners who were among the earliest to buy under the Help to Buy equity loan scheme may be coming to the end of their current deal and could switch to save themselves some money,” said Jaedon Green, Leeds Building Society’s director of product and distribution.
“Mortgage rates are at historic lows at the moment and the average two-year fixed rate mortgage has fallen since the government launched the scheme in March 2013."
The Help to Buy scheme, which involves taking an equity loan from the government as well as a mortgage, has now closed to new applicants meaning there are a limited number of banks offering Help to Buy mortgages.
Those on the scheme looking for a better deal can either choose to repay the loan when they remortgage, or look for a specialist mortgage like the Leeds offering.
Matthew Bird, mortgage adviser from Seer Green in Wales, said those on these deals should be able to get better rates if they shop around now.
"Rates have fallen a great deal over the last few years. Even if they just talk to their own provider they may be able to get a better rate," he said.
rosie.murray-west@ft.com
